Bank of Canada studying whether core inflation can be measured better

By Promit Mukherjee and David Ljunggren

OTTAWA, Oct 2 (Reuters) – The Bank of Canada is considering changes to how it measures preferred inflation metrics to give it a better idea of how external shocks are affecting the economy, a senior official said on Thursday.

Deputy governor Rhys Mendes said inflation was becoming more volatile given swings in U.S. trade policy, structural changes and rising geopolitical conflict.

“So we need to think about how we assess — and talk about — underlying inflation as we confront this new reality,” he said.

The study into whether officials can do a better job of measuring underlying inflation will be part of a scheduled five-year view of the central bank’s mandate with the government.

The framework is up for renewal next year and the BoC has already